(f) Provisions

Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, it is probable that
an outflow of resources embodying economic
benefits will be required to settle the obligation
and a reliable estimate can be made of the
amount of the obligation. The expense relating
to a provision is presented in the standalone
statement of profit and loss net of any
reimbursement. If the effect of the time value
of money is material, provisions are discounted
using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.

When discounting is used, the increase in
the provision due to the passage of time is
recognised as a finance cost.

Warranty

Provisions for warranty related costs are
recognised as and when the product is sold or
service provided. Provision is based on historical
experience. The estimate of such warranty
related costs is reviewed annually. A provision
is recognised for expected warranty claims on
products sold, based on past experience of the
level of repairs and returns. Assumptions used to
calculate the provision for warranties are based
on current sales levels and current information
available about returns. The Company generally
offers 12 - 24 months of warranty for its products.

(g) Contingent liabilities

A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond
the control of the Company. It includes a present
obligation that is not recognised because it is

not probable that an outflow of resources will
be required to settle the obligation. It also arises
in extremely rare cases where there is a liability
that cannot be recognised because it cannot
be measured reliably. The Company does not
recognise a contingent liability but discloses its
existence in the standalone financial statements.

(h) Government grants and subsidies

Government grants are recognised where there
is reasonable assurance that the grant will be
received and all attached conditions will be
complied with. When the grant relates to an
expense item, it is recognised as income on a
systematic basis over the periods that the related
costs, for which it is intended to compensate, are
expensed. When the grant relates to an asset, is
recognised as income in equal amounts over the
expected useful life of the related asset.

(i) Taxes

Income tax expense comprises of current and
deferred tax

Current Income tax

Current income tax assets and liabilities are
measured at the amount expected to be
recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute
the amount are those that are enacted or
substantively enacted, at the reporting date in
the country where the Company operates and
generates taxable income. Current income tax
relating to items recognised outside profit or loss
is recognised outside standalone statement of
profit and loss (either in other comprehensive
income or in equity). Management periodically
evaluates positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
establishes provisions where appropriate.

Deferred Tax

Deferred tax is recognised in respect of
temporary differences between the tax bases of
assets and liabilities and their carrying amounts
for financial reporting purposes at the reporting
date. Deferred tax liabilities are recognised for
all taxable temporary differences, except when
the deferred tax liability arises from an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,

affects neither the accounting profit nor taxable
profit or loss.

Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will be
available against which the deductible temporary
differences, and the carry forward of unused tax
credits and unused tax losses can be utilised,
except when the deferred tax asset relating to
the deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised to the
extent that it has become probable that future
taxable profits will allow the deferred tax asset to
be recovered. Deferred tax assets and liabilities
are measured at the tax rates that are expected
to apply in the year when the asset is realised or
the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively
enacted at the reporting date.

Deferred tax relating to items recognised outside
profit or loss is recognised outside profit or loss
(either in other comprehensive income or in
equity). Deferred tax assets and deferred tax
liabilities are offset if a legally enforceable right
exists to set off current tax assets against current
tax liabilities and the deferred taxes relate to
the same taxable entity and the same taxation
authority.

(j) Cash and cash equivalents

Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and
short-term deposits with an original maturity of
three months or less, which are subject to an
insignificant risk of changes in value.

(k) Property, plant and equipment

Property, plant and equipment held for use in the
production or supply of goods or services, or for

administrative purposes, are stated in the balance
sheet at cost (net of duty / tax credit availed)
less accumulated depreciation and accumulated
impairment losses.

Properties in the course of construction for
production, supply or administrative purposes are
carried at cost, less any recognised impairment
loss. Cost of an item of property, plant and
equipment comprises its purchase price, any
directly attributable cost of bringing the item to
its working condition for its intended use and
estimated costs of dismantling and removing
the item and restoring the site. Cost includes
professional fees and, for qualifying assets,
borrowing costs capitalised in accordance
with the Company's accounting policy. Such
properties are classified to the appropriate
categories of property, plant and equipment
when completed and ready for intended use.
Advance paid towards the acquisition of property,
plant and equipment are shown under non¬
current assets.

Depreciation of these assets, on the same basis
as other property assets, commences when
the assets are ready for their intended use. The
cost of property, plant and equipment not ready
for intended use before such date is disclosed
under capital work-in-progress. Freehold land is
carried at historical cost less any accumulated
impairment losses.

When significant parts of plant and equipment
are required to be replaced at intervals, the
Company depreciates them separately based on
their specific useful lives. Likewise, when a major
inspection is performed, its cost is recognised in
the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied and the same is depreciated based on
their specific useful lives. All other expenses on
existing property, plant and equipment, including
day-to-day repair and maintenance expenditure,
are charged to the standalone statement of
profit and loss for the period during which such
expenses are incurred.

An item of property, plant and equipment
and any significant part initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from its
use or disposal. Gains or losses arising from

derecognition of property, plant and equipment
are measured as the difference between the net
disposal proceeds and the carrying amount of
the asset and are recognised in the standalone
statement of profit and loss when the asset is
derecognised.

The Company identifies and determines cost
of asset significant to the total cost of the asset
having useful life that is materially different from
that of the life of the principal asset.

Depreciation is provided using the straight line
method as per the useful lives of the assets
estimated by the management, or at the rates
prescribed under Schedule II of the Companies
Act, 2013. The useful life estimate for major
classes of assets is as follows:

The Company, based on assessment made by
technical expert and management estimate,
depreciates certain items of building, plant
and machinery over estimated useful lives and
residual value which are different from the useful
life and residual values prescribed in Schedule II
to the Companies Act, 2013. The management
believes that these estimated useful lives and
residual values are realistic and reflect fair
approximation of the period over which the assets
are likely to be used.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate. The Company has
elected to continue with the carrying value of all
of its property, plant and equipment recognised
as of April 01, 2015 (the transition date)
measured as per the previous GAAP and use
such carrying value as its deemed cost as of the
transition date.

Intangible assets

Intangible assets with finite useful lives that are
acquired separately, is capitalised and carried
at cost less accumulated amortisation and
accumulated impairment losses. Amortisation
is recognised on a straight-line basis over their
estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end
of each reporting period, with the effect of any
changes in estimate being accounted for on a
prospective basis.

Costs incurred towards purchase of computer
software and licenses are amortised using the
straight-line method over a period based on
management's estimate of useful lives of such
computer software and licenses being 2 / 3
years, or over the license period of the software,
whichever is shorter.

Subsequent expenditure is capitalised only
when it increases the future economic benefits
embodied in the specific asset to which it relates
and the cost of the asset can be measured
reliably. All other expenditure is recognised in
profit or loss as incurred.

Derecognition of intangible assets

An intangible asset is derecognised on disposal,
or when no future economic benefits are
expected from use or disposal. Gains or losses
arising from derecognition of an intangible asset,
measured as the difference between the net
disposal proceeds and the carrying amount of the
asset is recognised in standalone statement of
profit and loss when the asset is derecognised.

Impairment of property, plant & equipment
and intangible assets carried at cost

The carrying amounts of assets are reviewed at
each balance sheet date for any indication of
impairment based on internal / external factors. If
any indication exists, or when annual impairment
testing for an asset is required, the Company
estimates the asset's recoverable amount.

An impairment loss is recognised wherever
the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount
is the greater of the assets or cash-generating
units (CGU) recoverable value and its value in
use. An asset's recoverable amount is the higher
of an asset's or cash-generating unit's (CGU) fair

value less costs of disposal and its value in use.

In assessing value in use, the estimated future
cash flows are discounted to their present value
using a pre-tax discount rate that reflects current
market assessments of the time value of money
and risks specific to the asset.

After impairment, depreciation is provided on
the revised carrying amount of the asset over its
remaining useful life. A previously recognised
impairment loss is increased or reversed
depending only for change in assumptions or
internal/external factors. However, the carrying
value after reversal is not increased beyond
the carrying value that would have prevailed
by charging usual depreciation if there was no
impairment.

(l) Investment property

Investment property is property held either to
earn rental income or for capital appreciation or
for both, but not for sale in the ordinary course
of business, use in the production or supply of
goods or services or for administrative purposes.
Upon initial recognition, an investment property
is measured at cost. Subsequent to initial
recognition, investment property is measured
at cost less accumulated depreciation and
accumulated impairment losses, if any.

Investment property is derecognised either when
it has been disposed of or when it is permanently
withdrawn from use and no future economic
benefit is expected from its disposal. Any gain
or loss on disposal of investment property
(calculated as the difference between the net
proceeds from disposal and the carrying amount
of the item) is recognised in profit or loss.

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to
the Company and the cost of the item can be
measured reliably.

Depreciation is provided using the straight line
method as per the useful lives of the assets
estimated by the management, or at the rates
prescribed under Schedule II of the Companies
Act, 2013.

Transfers to (or from) investment property are
made only when there is a change in use.
Transfers between investment property, owner-
occupied property and inventories do not change
the carrying amount of the property transferred
and they do not change the cost of that property
for measurement or disclosure purposes.

The fair values of investment property is disclosed
in the notes. Fair values is determined by an
independent valuer who holds a recognised and
relevant professional qualification and has recent
experience in the location and category of the
investment property being valued.

(m) Borrowing costs

Borrowing costs directly attributable to the
acquisition, construction or production of an
asset that necessarily takes a substantial period
of time to get ready for its intended use or sale
are capitalised as part of the cost of the asset. All
other borrowing costs are expensed in the period
in which they occur. Borrowing costs consist
of interest and other costs that an entity incurs
in connection with the borrowing of funds. It
also includes exchange differences to the extent
regarded as an adjustment to the borrowing
costs.

(n) Leases

At inception of a contract, the Company assesses
whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract
conveys the right to control the use of an
identified asset for a period of time in exchange
for consideration.

At commencement or on modification of a
contract that contains a lease component, the
Company allocates the consideration in the
contract to each lease component on the basis
of its relative stand-alone prices. However, for the
leases of property the Company has elected not
to separate non-lease components and account
for the lease and non-lease components as a
single lease component.

The Company recognises a right-of-use asset
and a lease liability at the lease commencement
date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments
made at or before the commencement date, plus
any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site

on which it is located, less any lease incentives
received.

The right-of-use asset is subsequently
depreciated using the straight-line method from
the commencement date to the earlier of the
end of the useful life of the right-of-use asset
or the end of the lease term, unless the lease
transfers ownership of the underlying asset to
the Company by the end of the lease term or
the cost of the right-of-use asset reflects that
the Company will exercise a purchase option.

In that case the right-of-use asset will be
depreciated over the useful life of the underlying
asset, which is determined on the same basis
as those of property and equipment. In addition,
the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.

The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the
Company's incremental borrowing rate. Generally,
the Company uses its incremental borrowing rate
as the discount rate.

The Company determines its incremental
borrowing rate by obtaining interest rates from
various external financing sources and makes
certain adjustments to reflect the terms of the
lease and type of the asset leased.

Lease payments included in the measurement of
the lease liability comprise the following:

• fixed payments, including in-substance fixed
payments;

• variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date;

• amounts expected to be payable under a
residual value guarantee; and

• the exercise price under a purchase option
that the Company is reasonably certain to
exercise, lease payments in an optional
renewal period if the Company is reasonably
certain to exercise an extension option, and
penalties for early termination of a lease
unless the Company is reasonably certain
not to terminate early.

The lease liability is measured at amortised
cost using the effective interest method. It is
remeasured when there is a change in future
lease payments arising from a change in an index
or rate, if there is a change in the Company's
estimate of the amount expected to be payable
under a residual value guarantee, if the Company
changes its assessment of whether it will exercise
a purchase, extension or termination option
or if there is a revised in-substance fixed lease
payment.

When the lease liability is remeasured in this
way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero.

Short-term leases and leases of low-value
assets

The Company has elected not to recognise
right-of-use assets and lease liabilities for leases
of low-value assets and short-term leases.

The Company recognises the lease payments
associated with these leases as an expense in
profit or loss on a straight-line basis over the
lease term.

(o) Retirement and other employee benefits

i. Defined benefit plan

• Provident Fund

Eligible employees of Company received
benefits from a provident fund, which was
a defined benefit plan. Under the plan, both
the eligible employee and the Company
made monthly contributions to the provident
fund plan equal to a specified percentage of
the covered employee's salary. The provident
fund contributions are made to employee
provident fund organisation.

• Gratuity and Pension

Under the gratuity plan, every employee
who has completed at least five years of
service gets a gratuity on separation at 15
days of last drawn basic salary for each
completed year of service. The scheme is
funded with Life Insurance Corporation of
India.

The Company also operates a pension plan for
select employees, the eligibility and the terms

and conditions of payment are at the discretion of
the Company. Gratuity and pension liabilities are
defined benefit obligations and are provided for
on the basis of an actuarial valuation done as per
the projected unit credit method as at the end of
each financial year.

Re-measurements, comprising of actuarial
gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on
the net defined benefit liability and the return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability),
are recognised immediately in the balance sheet
with a corresponding debit or credit to retained
earnings through OCI in the period in which they
occur. Re-measurements are not reclassified to
profit or loss in subsequent periods.

ii. Other employment benefits

• Compensated absence

Short term compensated absences are
provided for based on estimates. Long term
compensated absences in the nature of
defined benefit plan are provided for based
on actuarial valuation at the year end. The
actuarial valuation is done as per projected
unit credit method. Re-measurement gain
or loss is taken to the standalone statement
of profit and loss and are not deferred. Past
service costs are recognised in profit or loss
on the earlier of:

• The date of the plan amendment or
curtailment, and

• The date that the Company recognises
related restructuring costs.

Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset.
The Company recognises the changes in the net
defined benefit obligation as an expense in the
standalone statement of profit and loss as service
costs comprising current service costs, past-
service costs, gains and losses on curtailments
and non-routine settlements and net interest
expense or income.

iii. Defined contribution plan.

Defined contribution plan includes contribution
to employee state insurance scheme, employee
provident fund (from the period of surrender of
the Trust as mentioned above) and employee

pension scheme. The Company has no obligation
other than the contribution payable under the
above schemes. The Company recognises the
contribution payable to the above schemes as
an expenditure when the employee renders
related service. If the contribution payable to the
schemes for services received before the Balance
Sheet date exceeds the contribution already paid,
the deficit payable to the scheme is recognised
as a liability after deducting the contribution
already paid. If on the other hand the contribution
already paid exceeds the contribution due for the
services received before the Balance Sheet date,
then the excess is recognised as an asset to the
extent that the prepayment will lead to reduction
in future payment or cash refund.

iv. Termination benefits - Voluntary retirement

The Company has a scheme of voluntary
retirement applicable to certain employees.

The amount payable under such scheme is
recognised earlier of when the employee accepts
the offer or when a restriction of the entity's
ability to accept the offer takes effect.

(p) Financial instruments

i. Recognition and initial measurement

Trade receivables and debt securities issued are
initially recognised when they are originated. All
other financial assets and financial liabilities are
initially recognised when the Company becomes
a party to the contractual provisions of the
instrument.

A financial asset (unless it is a trade receivable
without a significant financing component)
or financial liability is initially measured at fair
value plus or minus, for an item not at FVTPL,
transaction costs that are directly attributable to
its acquisition or issue. A trade receivable without
a significant financing component is initially
measured at the transaction price.

ii. Classification and subsequent measurement

On initial recognition, a financial asset is
classified as measured at:

- amortised cost;

- FVOCI - debt investment;

- FVOCI - equity investment; or

- FVTPL.

because this best reflects the way the business
is managed and information is provided to
management. The information considered
includes:

- the stated policies and objectives for
the portfolio and the operation of those
policies in practice. These include whether
management's strategy focuses on earning
contractual interest income, maintaining

a particular interest rate profile, matching
the duration of the financial assets to the
duration of any related liabilities or expected
cash outflows or realising cash flows
through the sale of the assets;

- how the performance of the portfolio is
evaluated and reported to the Company's
management;

- the risks that affect the performance of the
business model (and the financial assets
held within that business model) and how
those risks are managed;

- how managers of the business are
compensated - e.g. whether compensation
is based on the fair value of the assets
managed or the contractual cash flows
collected; and

- the frequency, volume and timing of sales of
financial assets in prior periods, the reasons
for such sales and expectations about future
sales activity.

Transfers of financial assets to third parties in
transactions that do not qualify for derecognition
are not considered sales for this purpose,
consistent with the Company's continuing
recognition of the assets.

Financial assets that are held for trading or are
managed and whose performance is evaluated
on a fair value basis are measured at FVTPL.

Financial assets - Assessment whether
contractual cash flows are solely payments of
principal and interest

For the purposes of this assessment, 'principal'
is defined as the fair value of the financial asset
on initial recognition. 'Interest' is defined as
consideration for the time value of money and
for the credit risk associated with the principal
amount outstanding during a particular period of

time and for other basic lending risks and costs
(e.g. liquidity risk and administrative costs), as
well as a profit margin.

In assessing whether the contractual cash flows
are solely payments of principal and interest,
the Company considers the contractual terms of
the instrument. This includes assessing whether
the financial asset contains a contractual term
that could change the timing or amount of
contractual cash flows such that it would not
meet this condition. In making this assessment,
the Company considers:

- contingent events that would change the
amount or timing of cash flows;

- terms that may adjust the contractual
coupon rate, including variable-rate features;

- prepayment and extension features; and

- terms that limit the Company's claim to
cash flows from specified assets (e.g. non¬
recourse features).

A prepayment feature is consistent with the solely
payments of principal and interest criterion if
the prepayment amount substantially represents
unpaid amounts of principal and interest on the
principal amount outstanding, which may include
reasonable compensation for early termination of
the contract.

Additionally, for a financial asset acquired at
a discount or premium to its contractual par
amount, a feature that permits or requires
prepayment at an amount that substantially
represents the contractual par amount plus
accrued (but unpaid) contractual interest (which
may also include reasonable compensation for
early termination) is treated as consistent with
this criterion if the fair value of the prepayment
feature is insignificant at initial recognition.

Financial assets - Subsequent measurement
and gains and losses

Financial assets at FVTPL - These assets are
subsequently measured at fair value. Net gains
and losses, including any interest or dividend
income, are recognised in profit or loss.

Financial assets at amortised cost - These
assets are subsequently measured at amortised
cost using the effective interest method. The
amortised cost is reduced by impairment losses.

Interest income, foreign exchange gains and
losses and impairment are recognised in profit
or loss. Any gain or loss on derecognition is
recognised in profit or loss.

Debt investments at FVOCI - These assets are
subsequently measured at fair value. Interest
income calculated using the effective interest
method, foreign exchange gains and losses and
impairment are recognised in profit or loss. Other
net gains and losses are recognised in OCI. On
derecognition, gains and losses accumulated in
OCI are reclassified to profit or loss.

Equity investments at FVOCI - These assets
are subsequently measured at fair value.
Impairment losses (and reversal of impairment
losses) on equity investments measured at
FVOCI are not reported separately from other
changes in fair value. Dividends are recognised
as income in profit or loss unless the dividend
clearly represents a recovery of part of the cost
of the investment. Other net gains and losses
are recognised in OCI and are not reclassified to
profit or loss.

Financial liabilities - Classification, subsequent
measurement and gains and losses

Financial liabilities are classified as measured at
amortised cost or FVTPL. A financial liability is
classified as at FVTPL if it is classified as held-
for-trading, it is a derivative or it is designated
as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net
gains and losses, including any interest expense,
are recognised in profit or loss. Other financial
liabilities are subsequently measured at amortised
cost using the effective interest method. Interest
expense and foreign exchange gains and losses
are recognised in profit or loss. Any gain or loss on
derecognition is also recognised in profit or loss.

iii. Derecognition

The Company derecognises a financial asset when:

- the contractual rights to the cash flows from
the financial asset expire; or

- it transfers the rights to receive the
contractual cash flows in a transaction in
which either:

• substantially all of the risks and rewards
of ownership of the financial asset are
transferred; or

• the Company neither transfers nor
retains substantially all of the risks and
rewards of ownership and it does not
retain control of the financial asset.

The Company enters into transactions
whereby it transfers assets recognised on
its balance sheet but retains either all or
substantially all of the risks and rewards of
the transferred assets. In these cases, the
transferred assets are not derecognised.

The Company derecognises a financial
liability when its contractual obligations
are discharged or cancelled or expire. The
Company also derecognises a financial
liability when its terms are modified and
the cash flows of the modified liability are
substantially different, in which case a new
financial liability based on the modified
terms is recognised at fair value.

On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid
(including any non-cash assets transferred or
liabilities assumed) is recognised in profit or
loss.

iv. Offsetting

Financial assets and financial liabilities are offset
and the net amount presented in the balance
sheet when, and only when, the Company
currently has a legally enforceable right to set off
the amounts and it intends either to settle them
on a net basis or to realise the asset and settle
the liability simultaneously.

(q) Dividend to shareholders

Final dividend distributed to equity shareholders
is recognised in the period in which it is approved
by the members of the Company in the Annual
General Meeting. Interim dividend is recognised
when approved by the Board of Directors at the
Board Meeting. Both final dividend and interim
dividend are recognised in the Standalone
Statement of Changes in Equity.

(r) Earnings Per Share

Basic earnings per share are calculated by
dividing the net profit for the period attributable
to equity shareholders by the weighted average
number of equity shares outstanding during the
period.

For the purpose of calculating diluted earnings
per share, the net profit for the period attributable
to equity shareholders and the weighted average
number of shares outstanding during the period
are adjusted for the effects of all dilutive potential
equity shares, if any.

(s) Recent pronouncements

Ministry of Corporate Affairs (“MCA”) notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting

Standards) Rules as issued from time to time.

For the year ended March 31, 2025, MCA has
notified Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to
sale and leaseback transactions, applicable to the
Company w.e.f. April 01, 2024. The Company has
reviewed the new pronouncements and based
on its evaluation has determined that it does
not have any significant impact in its financial
statements.

General reserve - Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net
income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure
that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the
total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act
2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.
However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific
requirements of Companies Act, 2013.

Capital reorganisation reserve - Amount represents a reserve created during the demerger of brakes division from
Sundaram Clayton Limited.

Retained Earnings - The amount that can be distributed by the Company as dividends to its equity shareholders is
determined based on the financial statements of the Company and also considering the requirements of the Companies Act,
2013.

31 Significant accounting judgements, estimates and assumptions

The preparation of the Company's standalone financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Key Judgements estimates and assumptions

In the process of applying the Company's accounting policies, management has made the following key judgements, estimates
and assumptions, which have the most significant effect on the amounts recognised in the standalone financial statements:
Provision and contingent liability

On an ongoing basis, Company reviews pending cases, claims by third parties and other contingencies. For contingent
losses that are considered probable, an estimated loss is recorded as an accrual in standalone financial statements. Loss
contingencies that are considered possible are not provided for but disclosed as contingent liabilities in the standalone
financial statements. Contingencies the likelihood of which is remote are not disclosed in the standalone financial statements.
Gain contingencies are not recognised until the contingency has been resolved and amounts are received or receivable. The
management estimates likely outcome of any pending cases and other contingencies based upon the Company's / expert's
interpretation of applicable tax laws, relevant judicial pronouncements.

Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of the obligation are
determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate, future salary increases and mortality rates.
Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are reviewed at each reporting date.

Further details about defined benefit obligations are given in note 33.

Allowance for inventories

An allowance for inventory is recognised where the realisable value is estimated to be lower than the inventory carrying value.
The inventory allowance is estimated taking into account various factors and losses associated with obsolete / slow-moving /
redundant inventory items. The Company has, based on these assessments, made adequate allowance in the books.

32 Employee Benefits Obligation
Defined Benefit Plan

Gratuity

The gratuity plan is governed by the Payment of Gratuity Act, 1972 ('Act') . Under the Act, employee who has completed five
years of service is entitled to specific benefit. The level of benefits provided depends on the member's length of service and
salary at retirement age.

Risk exposure and asset liability matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as company take on
uncertain long term obligations to make future benefit payments.

1) Liability risks

i) Asset-Liability Mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration
with the defined benefit liabilities, the Company is successfully able to neutralise valuation swings caused by
interest rate movements.

ii) Discount Rate Risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practice
can have a significant impact on the defined benefit liabilities.

iii) Future Salary Escalation and Inflation Risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising
salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities
especially unexpected salary increases provided at management's discretion may lead to uncertainties in estimating
this increasing risk.

2) Asset risks

All plan assets are maintained in a trust fund managed by LIC of India. LIC has a sovereign guarantee and has been
providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all
assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this
option provides a high level of safety for the total corpus. A single account is maintained for both the investment and
claim settlement and hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of.

There have been no transfers between Level 1 and Level 2 during the year.

All other financial liabilities & assets are carried at amortised cost and their carrying value approximates fair value.

40 Financial risk management objectives and policies

The Company's principal financial liabilities, include trade and other payables. The Company has various financial assets such
as trade receivables and cash and short-term deposits, which arise directly from its operations. The Company also holds
FVTPL investments.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the
management of these risks. The Company's senior management ensures that the Company's financial risk activities are
governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance
with the Company's policies and risk objectives. It is the Company's policy that no trading in derivatives for speculative
purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are
summarised below.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity
price risk. Financial instruments affected by market risk include loans, deposits and FVTPL investments.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company's investments are primarily in fixed rate interest bearing investments. Also, the Company
has no borrowings and hence not exposed to interest rate risk.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the
Company's operating activities (when revenue or expense is denominated in a foreign currency).

The majority of the Company's revenue and expenses are in Indian Rupees, with the remainder denominated in US Dollars
and EURO. The following table demonstrates the sensitivity to 5% change in USD and EURO exchange rates on foreign
currency exposures as at the year end, with all other variables held constant. The Company's exposure to foreign currency
changes for all other currencies is not material.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its
financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial
instruments.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans and
advances. None of the financial instruments of the Company result in material concentrations of credit risks. Exposure to
credit risk - The carrying amount of financial assets represents the maximum Credit exposure. The maximum exposure to
Credit risk was INR 263,165.58 lakhs as at March 31, 2025 and INR 227,967.14 lakhs as at March 31, 2024, being the total
of the carrying amount of balances with banks, deposits with banks, trade receivables and other financial assets. As at March
31, 2025, 80% of the total dues was receivable from top 10 customers (as at March 31, 2024 - 80%). These receivables are
from customers whose credit rating is above the average. Credit risk from balances with banks and investment of surplus
funds in mutual funds is managed by the Company's treasury department. The objective is to minimise the concentration of
risks by investing in safer investments of high pedigree.

Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk
management is to maintain sufficient liquidity and ensure funds are available for use as per requirements. The Company's
prime source of liquidity is cash and cash equivalents and the cash generated from operations. The Company has no
outstanding bank borrowings. The Company invests its surplus funds in bank, fixed deposit and mutual funds, which carry
minimal mark to market risks. The table below summarises the maturity profile of the Company's financial liabilities based on
contractual undiscounted payments.

43 Other Statutory Information

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

ii) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies
beyond the statutory period.

iii) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

iv) The Company has not advanced or loaned or invested funds (either from borrowed funds or share premium or any
other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities ('intermediaries') with the
understanding (whether recorded in writing or otherwise) that the intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Company ('Ultimate Beneficiaries') or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities ('Funding Party') with
the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

vi) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or
survey or any other relevant provisions of the Income Tax Act, 1961).

vii) The Company has no transactions with struck off companies during the year.

viii) The Company has not been declared as wilful defaulter by any bank or financial institution or government or any
government authority.

ix) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

x) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous
financial year

xi) The Company has not taken borrowings from banks and financial institutions on the basis of security of current assets.

44 Events after the reporting period

The Board has proposed a final dividend of 380% (INR 19 per share of the face value of INR 5 each) for the year 2024-25
subject to the approval of the members at the ensuing Annual General Meeting.

Material accounting policies (note 2.2)

For and on behalf of the Board of Directors of As per our report of even date

ZF COMMERCIAL VEHICLE CONTROL SYSTEMS INDIA LIMITED For B S R & Co. LLP

Chartered Accountants

Firm's Registration no. 101248W/W-100022

Akash Passey P Kaniappan

Chairman and Director Managing Director

DIN: 01198068 DIN: 02696192

M. Muthulakshmi Sweta Agarwal K Sudhakar

Company Secretary Chief Financial Officer Partner

Membership no.: 214150

Place: Chennai Place: Chennai

Date: May 15, 2025 Date: May 15, 2025